As the figureheads of Scotland�s universities, they preside over more than £1bn of public money and the education of some 241,000 students every year.

AS the figureheads of Scotland's universities, they preside over more than £1bn of public money and the education of some 241,000 students every year.

In return for this, and the responsibility of running what is arguably the most important engine room of the Scottish economy, university principals are paid handsome salaries.

Last year, as a survey by The Herald reveals, university principals were awarded average pay rises of 5.2%, bringing the average salary to £162,000.

While the increase has been met with dismay by lecturers' unions, whose members received a rise of 3.5%, and come at a time when the sector as a whole is facing a financial squeeze, there is no doubt the job of a university principal is a critical one.

The most high-profile jobs, and therefore among the best paid, are at the heads of Scotland's four ancient universities - Aberdeen, St Andrews, Edinburgh and Glasgow. Those at newer universities are paid less, with post-1992 universities and art colleges at the bottom of the scale.

The joint-highest paid principal is Professor Duncan Rice, from Aberdeen University, who gets a basic salary of £209,000, up 3.4% on the previous year.

It may seem incongruous that a university which regularly comes fourth in Scotland in a variety of different league tables pays such a high salary.

However, when he returned to his home city of Aberdeen in 1996 from New York University, where he was vice-principal, Professor Rice's was a very significant appointment. Having run one of the more successful higher education fundraising campaigns in the US, after his appointment at Aberdeen, Professor Rice launched a similar campaign to raise £150m over 10 years.

His arrival also ushered in a more Americanised pay structure, with other ancient universities upping the salaries of their principals in order to compete. Professor Rice is married to Susan Rice, the chief executive of Lloyds TSB Scotland.

The second joint-highest paid principal is Professor Tim O'Shea, from Edinburgh University, also on £209,000, a rise of 4.5% on the previous year.

He took his current post in 2002 after a successful academic career which culminated in him becoming vice-principal of the University of London. His tenure at Edinburgh has seen the university cement its place as the best in Scotland, recently ranked 48th in the world by the Times Higher Education Supplement. Following the example of Aberdeen, he has also undertaken a major international fundraising campaign to raise £350m by 2011.

The university is also host to the £133m HECToR project, the UK's newest and fastest supercomputer.

The only principal in the top five for salary who is not at the helm of an ancient university is Sir Alan Langlands, from Dundee, who is paid £206,000 after a modest increase of 2%, a rise which may have been restricted as a result of the university's financial situation and the fact it warned of the need for more than 100 job losses last year.

Sir Alan commands a large salary because his was a high-profile appointment, coming from a post as chief executive of the NHS in England. He has built an international reputation in the development of healthcare policy and as a strategic manager of health services and received a knighthood in 1998 for his services to the NHS.

Sir Alan's tenure has seen Dundee become a world-ranking research institute, particularly in life sciences and medicine. It has also attracted investment and collaborations with world players in disease prevention.

One of the more significant rises of the year as reported, in The Herald last December, has been at Glasgow University, where Sir Muir Russell's pay has climbed by 8.5% to £205,000.

Sir Muir became principal in 2003. Prior to his appointment he was Permanent Secretary to the Scottish Executive since its establishment in July 1999.

Although Sir Muir's salary rises have angered lecturers' unions, which said he should have taken a pay cut as staff were being offered redundancy, others argue that the rise reflects the importance of the position and the need to offer a competitive salary comparable to other ancient universities.

When he was appointed, there was concern that a career civil servant would not be able to grasp the complexity of running a university, but Sir Muir has balanced the books for the first time in 10 years or more, although this was partly achieved through an unpopular programme of voluntary redundancies.

He has also outlined ambitious plans to see Glasgow University climb the world ranking for research and recent innovations have included the setting up of Scotland's first international college to recruit and prepare overseas students.

One of the lower increases for all university principals was the 1% rise awarded to Dr Brian Lang, at St Andrews, whose salary now stands at £199,000.

As head of Scotland's oldest university, Dr Lang, who stands down in December, has been the institution's figurehead at a time of unrivalled success, with the university named the country's best in The Times league table of higher education institutions.

Dr Lang has also driven investment of more than £50m into new student residences, facilities for computer science, international relations and the arts. Currently, investments of more than £50m are targeted at medicine, science and the university library. The university said the low rise was a result of financial pressures.

The highest percentage rises were at Edinburgh College of Art, where Professor Ian Howard's salary increased by 15.5% to £112,000, and Glasgow School of Art, where Professor Seona Reid got a rise of more than 14%, bringing her salary to £101,000.

Both institutions say the rises were the result of an exercise comparing their salaries to those of competing institutions. They also head world-renowned colleges which, in the case of Edinburgh, has just gone through a major redevelopment and now has some of the most modern facilities of any university in Scotland. Professor Reid was chief executive of the Scottish Arts Council at a time of controversy over the funding of theatre groups and Scottish Opera.

One pay rise that might raise eyebrows among staff is the 7.6% awarded to Professor Andrew Hamnett at Strathclyde, which has also warned of job losses. However, he is also seen as a safe pair of hands and is overseeing a major redevelopment which will modernise the university and bring its facilities up to date.

A spokesman for the university said part of the salary increase was caused by including some allowances previously paid in addition to the principal's salary.

Of the mid-ranking salaries, Professor Christine Hallett at Stirling University was given one of the larger rises, partly a reflection of the way she has established herself over the past three years while quietly building a reputation as a notable figure in higher education generally.

Professor Joan Stringer at Napier University, who was given a 5% rise, is also highly regarded and, apart from being the first female principal in Scotland, is now one of the longer serving, with five years at Napier.

She believes the fact there are now three female university principals illustrates the increasing representation of women at the top level in academia, but believes more work needs to be done to achieve real equality.

"It is still the case that in both Scotland and across the UK women are under-represented in the more senior posts in our universities," she said.

Professor Pamela Gillies at Glasgow Caledonian, who had a rise of 2.6%, has only been in the job since 2006, but, of all the universities, probably faces the toughest challenge in terms of the ambition of the institution. The university's vision is to encourage social regeneration and develop academic excellence in research.

Heriot-Watt's Anton Muscatelli, appointed last year, promises the most in terms of development. Former vice-principal at Glasgow University, his move is seen as the first step on a career which could see him eventually head one of the UK's top universities.